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Budget Brief: 2018 Proposed City of Milwaukee Budget

Our analysis of the Mayor's proposed City of Milwaukee budget indicates that structural challenges have come to a head. As a result, annual cuts in public safety staffing, as well as property tax increases that exceed the rate of inflation, may become the norm.

Keys areas of analysis:

Large spike in pension contribution must be accommodated. Because of new actuarial assumptions and other changes, the City’s employer contribution to its pension fund increases by $22 million, from $61 million in 2017 to $83 million in 2018. We analyze the impacts and whether such increases will be required in the future.

Public safety is not shielded from budget cutting in 2018. With pension-related expenditure pressures necessitating deep departmental cuts, public safety essentially is treated like all other City functions in the proposed budget. We provide context on proposed police and fire reductions and the Mayor’s sales tax alternative.

4% annual increases in the property tax levy could become commonplace. With a $9.7 million (3.7%) proposed increase in the property tax and only 0.7% growth in intergovernmental revenue, the property tax jumps ahead of intergovernmental revenue as the largest single revenue source in the City budget. We explore the ramifications and the possibility of ongoing property tax increases in the 4% range.

Capital improvements budget is trimmed as City seeks to control borrowing. Despite vast capital needs, the proposed budget reduces capital improvements spending by $8.2 million (5.4%) and levy-supported borrowing and cash by $12.7 million (13.5%). We analyze the conflict between the City’s need to reduce borrowing and its equally pressing need to address major capital projects, including repairs to City Hall.